What Is an Insurance Payment Deferral Agreement (Letter of Protection) in a Florida Injury Case?
Updated: 4 days ago
Last updated: Sept. 7, 2026
HB 837 Post-Mortem: Insurance-Defense Bias, Medical Bills, and Medicare Rates
An insurance-payment deferral agreement—usually called a letter of protection or LOP—is one of the most important ways an injured person can receive medical treatment while a Florida personal injury claim remains unresolved. It permits treatment to proceed when the patient cannot pay immediately, has exhausted PIP benefits, lacks health insurance, or cannot find an appropriate medical provider willing to wait while an insurance company disputes or delays payment.
Since Florida enacted HB 837 in 2023, insurance-company lawyers have increasingly tried to use the existence of a letter of protection against the injured person. The defense may suggest that an insurance-payment deferral agreement makes the treatment, medical bill, or treating physician less trustworthy. But that is not what Florida law provides. An insurance-payment deferral agreement creates disclosure requirements and permits additional evidence. It does not establish that the patient was uninjured, the treatment was unnecessary, the bill was unreasonable, or the treating physician was biased. The real question remains: what was the reasonable and necessary cost or value of the medical care caused by the accident?
What Is a Letter of Protection or Insurance-Payment Deferral Agreement?
A letter of protection, commonly abbreviated as an LOP, is an insurance-payment deferral agreement under which a medical provider treats an injured patient without demanding immediate payment. The patient remains responsible for the bill, while the provider agrees to defer collection in anticipation of payment from a future insurance settlement or judgment.
It is not free medical treatment. It is delayed insurance payment. Some providers may call the arrangement a medical lien, delayed insurance payment agreement, deferred-payment agreement, or another similar name. The title does not control. Florida Statute § 768.0427 broadly defines a letter of protection as any arrangement in which a provider renders treatment in exchange for a promise of payment from a personal injury or wrongful-death settlement or judgment. The statute applies regardless of what the insurance-payment deferral arrangement is called.
These agreements often become necessary because liability insurance companies ordinarily do not pay an injured person’s medical expenses while treatment is occurring. An insurance company may investigate the claim, deny responsibility, dispute causation, challenge the seriousness of an injury, or wait until the entire case can be settled. The patient, however, needs medical care now. An insurance-payment deferral agreement bridges that gap.
Why Insurance-Payment Deferral Agreements Exist
An insurance-company lawyer may begin at trial with the letter of protection, as though the LOP created the injury, treatment, or medical debt. That presentation reverses the actual sequence of events.
The collision happens first. The patient is injured. Medical care becomes necessary. PIP benefits may be limited or exhausted. Health insurance may be unavailable or may not cover the appropriate provider. The liability insurance company generally refuses to pay the patient’s medical expenses as they are incurred. Only then does a provider agree to defer payment so the patient can receive treatment.
The insurance-payment deferral agreement did not cause the treatment. The accident did.
The LOP did not cause the patient’s unpaid medical balance. The insurance company’s refusal to pay the claim while treatment was being provided created the need to delay payment.
Without an insurance-payment deferral agreement, an uninsured or underinsured accident victim may be forced to choose among going without care, personally funding expensive treatment, relying on a government program, or finding a medical provider willing to assume the delay and risk created by the insurance dispute.
That context matters when an insurance-company lawyer asks a jury to view the payment-deferral agreement with suspicion.
Medicare Is a Payor of Last Resort—not a Market-Price Survey
Even Medicare generally is not intended to serve as the primary payor when liability, no-fault, workers’ compensation, or another legally responsible source should pay for accident-related treatment.
The federal Medicare Secondary Payer system protects Medicare from paying when another entity has primary responsibility. According to the Centers for Medicare & Medicaid Services’ Medicare Secondary Payer guidance, liability and no-fault insurance generally pay first for accident-related medical services. Medicare may make conditional payments while a contested case remains pending, but it can later recover those payments from an insurance settlement, judgment, award, or other recovery.
The United States Department of Justice has likewise explained that the Medicare Secondary Payer statute generally requires the responsible insurer to make the primary payment, leaving Medicare to function as a secondary payor.
That makes Medicare a deeply imperfect model for measuring the open-market value of privately financed accident care.
Medicare is a government-administered program designed to protect public funds and establish reimbursement rates for covered beneficiaries. Its reimbursement schedules reflect federal statutes, regulations, budgetary decisions, coverage rules, administrative policies, purchasing power, and program limitations. Medicare does not determine its rates by collecting every price charged or paid in Florida’s private medical market and selecting the median.
A program designed to serve as a secondary payor or payor of last resort should not automatically become the insurance defense industry’s first and only measure of reasonable medical value.
How HB 837 Changed Florida LOP Litigation
Florida’s 2023 tort-reform legislation created § 768.0427, governing medical-expense evidence, disclosures concerning insurance-payment deferral agreements, and the recovery of past and future medical expenses in personal injury and wrongful-death cases.
The legislation did not prohibit letters of protection. It did not make insurance-payment deferral agreements improper. It created categories of admissible evidence and required greater disclosure concerning unpaid medical bills, health coverage, attorney referrals, and the sale of medical receivables.
The Florida Bar reported on the broad scope and immediate litigation impact of HB 837 when the legislation was enacted.
The distinction between admissible evidence and conclusive evidence is essential. A number may be admitted for the jury’s consideration without becoming the amount that the jury must accept as the reasonable value of care.
What Medical-Expense Evidence May Be Presented?
For past medical bills that have already been paid, § 768.0427 limits the evidence to the amount actually paid, regardless of the payment source.
For incurred but unpaid medical expenses—including charges being deferred under an insurance-payment deferral agreement or LOP—the statute provides several categories of admissible evidence. Depending on the patient’s coverage and circumstances, that evidence may include:
The amount the patient’s health insurer would have been obligated to pay, together with the patient’s contractual share;
For a patient without health coverage, or with Medicare or Medicaid, 120% of the applicable Medicare reimbursement rate;
If no applicable Medicare rate exists, 170% of the applicable Florida Medicaid rate;
The amount a factoring company paid or agreed to pay for the right to collect an insurance-payment deferral account; and
Evidence of reasonable amounts billed for medically necessary treatment or services.
The statutory language is important. Evidence of unpaid medical expenses “shall include, but is not limited to” the identified categories. The law therefore does not declare that Medicare is the exclusive measurement of reasonable medical value in every Florida injury case.
The statute separately permits evidence of reasonable amounts billed for medically necessary treatment. It also states that it does not impose an affirmative duty on a party to obtain a reduction in medical charges to which that party has no contractual entitlement.
A Medicare Benchmark Is Not Necessarily the Reasonable Market Value
For an uninsured patient, § 768.0427 permits evidence of 120% of the Medicare reimbursement rate. That does not transform Medicare into the median market value of the treatment.
A Medicare reimbursement figure may provide the absolute bottom or lower edge of the payment spectrum. It is unreasonable to label that number the “average,” “usual,” or “median” price without competent evidence proving where the number actually falls within the relevant medical market.
A true median requires a defined and representative dataset. It cannot be established merely by selecting a government reimbursement schedule because it produces a low number favorable to the insurance company.
An insurance-company billing expert should be required to answer:
What is the relevant geographic and medical market?
What payment data was collected?
Which payors and transactions were included?
Were privately paid, commercially insured, self-pay, delayed-payment, and litigation-related accounts considered?
Where does the Medicare rate fall within the complete distribution?
Is the figure the minimum, a lower percentile, an average, or an actual median?
What methodology permits the expert to call a government reimbursement figure a market rate?
Did the expert select Medicare because it produced the lowest available number?
Without those answers, the insurance lawyer may be doing little more than placing the lowest permitted benchmark before the jury and attaching the word “reasonable” to it.
Why Delayed Insurance Payment Is Different From Prompt Contractual Payment
A medical provider treating under an insurance-payment deferral agreement accepts risks and burdens that Medicare and commercial-network rates may not reflect.
The provider may:
Wait several years for payment;
Receive no payment if the case is unsuccessful and the patient cannot satisfy the balance;
Forgo ordinary collection activity while the insurance dispute remains pending;
Receive no copayment or deductible when treatment is provided;
Maintain records for use in litigation;
Respond to subpoenas and discovery;
Provide deposition or trial testimony;
Face attacks by an insurance-company lawyer concerning treatment and charges;
Receive no guaranteed patient volume; and
Remain outside any contractual network that would otherwise exchange discounted rates for prompt payment or a predictable stream of patients.
A commercial insurer may negotiate a reduced reimbursement rate in exchange for patient volume, standardized billing, prompt processing, network participation, and contractual limitations. Medicare brings enormous governmental purchasing power and a statutory reimbursement system.
An individual accident victim entering an insurance-payment deferral agreement receives none of those bargaining advantages. The patient and provider should not automatically be assigned a contractual discount that neither of them negotiated and to which neither is entitled.
The Insurance-Defense Overton Window
Much of the post-HB 837 fight concerns how the insurance defense frames the acceptable range of medical values before the jury evaluates the evidence.
An insurance-company lawyer may place Medicare at one end of the discussion and the provider’s unpaid charge at the other. A defense billing expert then calls the Medicare-based figure “reasonable” and characterizes every higher amount as inflated.
Repeated often enough, that framing moves the perceived range of acceptable outcomes—the litigation equivalent of an Overton window—downward. The defense-selected bottom becomes the supposed middle, and the provider’s actual charge becomes the alleged outlier.
That frame conceals important facts:
Medicare may be secondary to the insurance obligation involved in the accident;
Medicare rates are government reimbursement figures, not necessarily private-market medians;
Commercial insurance discounts arise from contracts unavailable to the patient;
Network providers may receive volume, prompt payment, administrative efficiencies, and other consideration for accepting discounted rates;
A provider operating under an insurance-payment deferral agreement accepts delay, litigation expense, and collection risk;
The injured person generally remains personally responsible for the unpaid balance;
The statute permits evidence of reasonable amounts billed for medically necessary treatment; and
The statute does not require a claimant to obtain a reduction to which the claimant has no contractual right.
The jury should receive enough evidence to evaluate the entire transaction. It should not be handed a lower-bound government rate and encouraged to mistake it for the private-market median.
Attorney Referrals and Claims of Treating-Physician Bias
Section 768.0427 requires disclosure of whether the patient was referred for treatment under an insurance-payment deferral agreement and, if so, who made the referral. If the patient’s attorney made the LOP referral, the statute permits disclosure despite attorney-client privilege. In that circumstance, the financial relationship between the law firm and a testifying medical provider—including the number and frequency of referrals and the financial benefit obtained—is relevant to potential bias.
That evidence may be examined, but it should not be exaggerated.
An attorney referral does not prove that the patient was uninjured. It does not prove that the medical treatment was unnecessary. It does not invalidate diagnostic imaging, examination findings, operative findings, or the patient’s response to care. It does not establish that the medical provider falsified an opinion.
A fair inquiry should examine the actual relationship:
How many patients did the attorney refer?
Over what period were those referrals made?
What percentage of the provider’s total practice came from the law firm?
What financial benefit did the provider actually receive?
Did the provider apply the same medical criteria to referred and non-referred patients?
Was the provider’s treatment supported by examinations, imaging, testing, surgery, or other objective findings?
Did the provider form opinions while treating the patient, before any request for testimony?
Does the patient remain legally responsible for the deferred medical bill?
The fact that a Florida injury lawyer helped a client locate a provider willing to defer payment while an insurance company refused to pay does not, standing alone, establish medical bias.
Bias Cannot Be a One-Way Street
If an insurance-company lawyer argues that repeated referrals and financial payments can influence a treating physician, the jury should also examine the insurance industry’s financial relationships with its own witnesses.
A defense medical examiner, coding consultant, radiology reviewer, billing expert, biomechanical expert, or life-care-plan rebuttal witness may repeatedly receive assignments from the same insurance carriers, defense firms, or litigation vendors.
Relevant questions may include:
How much money has the expert received from insurance companies and defense firms?
How many defense examinations or record reviews does the expert perform each year?
What percentage of the expert’s professional income comes from insurance litigation?
How often has the same insurance company, law firm, or vendor retained the expert?
How many times has the expert testified for injured claimants compared with insurance defendants?
Does the expert routinely conclude that treatment was unrelated, unnecessary, excessive, or overpriced?
Did the expert personally examine or treat the patient?
Does the expert assume any responsibility for the patient’s medical recovery?
Did the expert consider the delay and nonpayment risk accepted by the treating provider?
Did the expert select Medicare or another reimbursement source because it produced the lowest number?
A treating physician operating under an insurance-payment deferral agreement has at least assumed responsibility for the patient’s medical care and often accepted years of payment uncertainty. A retained insurance-defense expert may have no treatment relationship, no responsibility for the patient’s recovery, and no financial loss if the proposed valuation proves unrealistic.
Potential financial bias should be examined on both sides of the courtroom.
Factored Medical Receivables Are Also Risk-Adjusted Transactions
If a provider sells the right to collect an insurance-payment deferral account to a factoring company or another third party, § 768.0427 requires disclosure of the purchaser’s identity and the amount paid or agreed to be paid for the receivable, including any discount.
That purchase price is admissible evidence. It is not necessarily identical to the reasonable value of the underlying medical treatment.
A company purchasing a delayed insurance payment account may discount its offer because:
Payment may be delayed for years;
Liability remains contested;
Medical causation may be disputed;
Litigation may be unsuccessful;
Collection from the patient may be difficult;
Additional administrative and legal expenses may be incurred; and
The purchaser expects a return for accepting the risk.
The sale of a $10,000 receivable for a lower amount does not necessarily mean the medical services were worth only the purchase price. The transaction may instead reflect the time value of money, uncertainty, collection expense, and litigation risk.
An insurance-company lawyer should not be permitted to treat a risk-adjusted investment price as though it were a prompt cash payment for medical care. They are different transactions.
What an Injured Patient Should Understand Before Signing
Before signing an insurance-payment deferral agreement, medical lien, or LOP, an injured person should understand:
The patient ordinarily remains responsible for the medical bill even if the personal injury recovery is insufficient;
The agreement, itemized bills, available coverage, and referral source may have to be disclosed;
The defense may challenge the medical necessity and reasonable value of treatment;
A provider may be questioned about attorney referrals and financial relationships;
A sale or transfer of the medical receivable may have to be disclosed;
Medical bills should be itemized and properly coded;
The agreement should state whether the provider may sell or transfer the account;
Any agreement concerning a reduction or compromise should be clearly explained; and
Medical decisions should remain based on the patient’s healthcare needs rather than the anticipated value of the claim.
The patient and attorney should also investigate whether PIP, health insurance, Medicare, Medicaid, workers’ compensation, uninsured motorist coverage, or another source may apply.
What HB 837 Did Not Change
HB 837 did not make insurance-payment deferral agreements illegal. It did not establish that a treating physician working under an LOP is dishonest. It did not declare all billed charges unreasonable. It did not make Medicare the exclusive measure of medical value. It did not make a defense expert’s preferred reimbursement figure conclusive. It did not eliminate the jury’s responsibility to evaluate competing evidence.
The statute also did not eliminate the reality that many injured people cannot obtain necessary treatment through conventional insurance billing arrangements. What changed is the evidence the parties may present and the information they must disclose. That requires greater preparation—not automatic acceptance of the lowest figure selected by the insurance defense.
Other HB 837 Changes Affecting Florida Accident Claims
The medical-expense statute was enacted as part of a broader 2023 tort-reform package. That legislation also shortened Florida’s negligence statute of limitations from four years to two years for many claims accruing after March 24, 2023. See Florida Statute § 95.11(5)(a).
HB 837 also created a modified comparative-negligence system under which a claimant found more than 50% at fault generally cannot recover negligence damages. See Florida Statute § 768.81(6). The Florida Bar’s proposed civil jury-instruction amendments addressing HB 837 illustrate how the legislation continues to affect the presentation of Florida negligence cases. Taken together, these changes make it especially important to investigate a Florida injury case promptly, preserve evidence, identify every available insurance policy, document medical necessity, and prepare a defensible medical-expense analysis well before trial. Those steps are particularly important in a Florida car accident claim, where multiple payment sources—including PIP, health insurance, Medicare, liability insurance, and uninsured or underinsured motorist coverage—may affect how treatment is initially billed and ultimately paid.
Frequently Asked Questions
Is a letter of protection free medical care?
No. A letter of protection is an insurance-payment deferral agreement. It ordinarily postpones collection while the insurance claim is pending. The patient generally remains responsible for the medical charges subject to the agreement’s terms and any later compromise.
Why would a patient need an insurance-payment deferral agreement?
The liability insurer generally does not pay medical expenses while the patient is receiving treatment. If PIP is exhausted, health insurance is unavailable, or an appropriate provider will not accept the patient’s coverage, an LOP may allow necessary care to proceed while the insurance dispute remains pending.
Can the insurance lawyer argue that my doctor is biased?
If the claimant’s attorney made the referral for treatment under an insurance-payment deferral agreement, § 768.0427 makes the resulting financial relationship relevant to potential bias. The referral alone, however, does not prove bias, unnecessary treatment, or an inaccurate medical opinion.
Can the plaintiff examine a defense doctor about insurance-company income?
Potential bias arising from recurring insurance assignments and financial compensation may be a legitimate subject of examination, subject to the trial court’s evidentiary rulings and the facts of the particular case.
Does the jury have to value my treatment at the Medicare rate?
Section 768.0427 permits Medicare-based evidence in specified circumstances, but it also permits evidence of reasonable amounts billed for medically necessary treatment. The statute does not describe Medicare as the private-market median or make it the exclusive measure in every case.
Why can’t Medicare simply pay every accident-related medical bill?
Federal Medicare Secondary Payer rules generally place applicable liability, no-fault, or workers’ compensation insurance ahead of Medicare for accident-related care. Medicare may make certain conditional payments and later seek reimbursement.
Does the factoring-company purchase price establish the value of treatment?
Not automatically. The purchase price is admissible in the circumstances specified by the statute, but it may reflect delayed payment, collection uncertainty, litigation expense, and investment risk rather than the reasonable value of the underlying medical services.
Call Today. Discuss Directly With Dan.
Medical-expense litigation after HB 837 requires more than comparing a provider’s bill to a Medicare fee schedule. It requires evidence explaining the medical treatment, the patient’s responsibility for the bill, the provider’s payment risk, the relevant medical market, and the financial relationships of witnesses on both sides. When you call Reinfeld Law, you speak directly with Dan Reinfeld, an attorney with more than 25 years of experience who personally handles the details that can change how a claim is built and presented. You do not speak with a call center reading from a script. Dan offers flexible consultation options, including telephone, Zoom, hospital, and home visits. Consultations are free, and you pay no attorney’s fee unless he recovers money for you. Evening and weekend appointments are available. Call Dan (954) 923-6110
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